I stayed up later than usual last night to see how the vote would turn out and by the time I turned out the lights, it looked like the Leave camp was going to win.

Personally, I thought that they would vote to Remain, partly because of the polls, partly because I thought it was in their best economic interests and partly because voters in Scotland and Quebec stayed in their referendums.  That’s a little different, and some time ago for Quebec, and I think that I underestimated the anger and frustration of the British populous.

The political fallout has been swift, with British Prime Minister announcing that he will step down and the market response has been sharp.

Throughout the night, the British pound fell by more than 10 percent against the dollar to levels not seen since 1985.  The dollar surged against most currencies, with the exception of the Japanese yen, which is considered a safe haven currency.

Our exposure to currencies is indirect, through our holdings of foreign stocks.  The stronger dollar will weigh on the performance of our non-US stock holdings along with the expected stock price declines.

At this point, S&P futures suggest that stocks will open around three percent lower than yesterday and foreign markets like the British FTSE 100 are four to six percent lower.

Bonds prices, on the other hand, are surging.  The yield on the 10-year US Treasury note has fallen from 1.74 percent yesterday to 1.54 percent this morning, a dramatic move (as bond yields fall, bond prices rise).

There is no question that markets will be chaotic in the short run, but there are a few important points to remember.

First, most of the losses that we are likely to experience today are simply a reversal of the gains over the past week.  In the last week, for example, the MSCI ACWI ex US index that tracks developed and emerging markets stocks was up 6.69 percent through Thursday.

The S&P 500 is up to a lesser extent in the last week, 1.71 percent, but it’s higher for the year.  Even if stocks end the day down three percent, they will still be up ~1.5 percent for the year.  That isn’t anything to write home about, but the basic point is that even with steep losses today, we’ll still be break even for the year.

Second, I don’t think that this is a Lehman moment.  Expected volatility has jumped this morning as you would expect, but we’re still within the normal range – nothing like where things were in 2008.  The Volatility Index, or VIX, is at 23.45 this morning, compared to 80 in 2008.  (Here’s an article from last August about VIX levels for reference).

The 2008 financial crisis was essentially a run on the banks when investors realized how over leveraged they were and couldn’t absorb their losses without government intervention.  Just yesterday, the Fed released the stress test results for our big banks and they all passed.

Lastly, I don’t think what happens today is necessarily a signal of things to come and markets will be adjusting to new information for some time.

Undoubtedly, the level of uncertainty is high because no one has ever exited the EU before.  As I said earlier this week, I’m confident that the Brits will work out new trade treaties and that over the long run, the British economy will be fine.

Over the short run, their economy is likely to weaken, which is obviously undesirable since economic growth is already fragile worldwide.  There will also be questions about what other countries may want to leave (I’ve already seen the headline, ‘Who’s Nexit?’) and there are a number of European elections coming up that have populist contenders, not to mention our own election in five months.

Indiscriminate selling could create some buying opportunities, we should all expect choppy markets for a while.  We’ve planned for choppy markets with our financial planning models and our bond allocations.

Ultimately, the World War II British adage, Keep Calm and Carry On is the best way to take the Brexit news.